Tax reform runs aground

Atax commission appointed every two decades is expected to rise above legislative politics, not sink to the same level. If the attempt to railroad former Senate President John McKay and his plan to broaden the sales tax is any indication, the commission may end up serving only as an echo chamber for a Legislature that turns a deaf ear to any honest discussion of tax reform.

The McKay plan is at least a thoughtful attempt to wrestle with the undeniable disconnect between this modern growing state and its antiquated tax structure. Florida has no income tax, minimal business taxes and a sales tax that hasn't really changed in a half-century. That's why the poorest 20 percent are taxed at nearly five times the rate of the richest 1 percent, and why state revenue growth has bounced around from a high of 27 percent to a low of -3.5 percent in the last four decades.

McKay wants to look at the $100-billion worth of exemptions and exclusions to the state sales tax and see which ones are no longer deserving. The theory is that the fewer the exemptions, the broader the base and the fairer the tax. McKay would use any new sales tax proceeds to reduce property taxes, possibly by as much 40 percent.

When McKay tried to enact a similar plan as Senate president, he was viciously attacked by business lobbyists and openly opposed by then-Gov. Jeb Bush. McKay now is an appointed member of the Taxation and Budget Reform Commission, and it looks as though this constitutionally created board will give his plan no fairer hearing.

McKay was blindsided Tuesday by an economic study that was approved without his knowledge and conducted by a former economic adviser to Bush. It claimed his plan would cost the state 53,000 jobs, a questionable assertion considering that McKay seeks no net increase in taxes.

The McKay plan is only one idea about how to make Florida's tax system more equitable and stable, but the commission appears headed in the opposite direction. The day before his plan was delayed, a committee unanimously endorsed a revenue and spending cap that sounds more like a constitutional rant than a prescription for responsible government spending.

For cities and counties, the cap would call for increased budgets to be submitted to voters in a form of Hometown Democracy. For the state, it would enact spending limits that are, at best, superfluous for a government whose payroll already ranks the lowest in the nation.

Mike Hogan, the Duval County tax collector and commission member who proposed the cap, turned to a common antitax refrain: "Taxpayers want to have a say in how government grows and how government taxes."

Those aggrieved taxpayers get that chance every election, and their voices are clearly being heard in the State Capitol. In less than a year, lawmakers and voters have combined to cut $24.3-billion in mostly local property taxes. And both Gov. Charlie Crist and House Speaker Marco Rubio insist they want to go further.

In theory, the Taxation and Budget Reform Commission is insulated from the cruder election politics that work against genuine and thoughtful reform on taxes. The reality is looking not so different from the Legislature itself. This is an opportunity that comes along once every 20 years, and it should not be hijacked by pandering and surprise economic studies.

[Last modified February 13, 2008, 23:08:18]